May 17, 2006
The Honorable Governor Mike Easley
Office of the Governor
Raleigh, NC 27611
Dear Governor Easley:
I am writing to ensure you have factual information regarding my recommendations to the Board of County Commissioners regarding the use of anticipated education lottery proceeds in Mecklenburg County.
In my FY2007 recommended budget to the Mecklenburg County Board of Commissioners, I proposed a strategy that allocates approximately half of the anticipated proceeds from the education lottery to offset the increased cost of school debt service next year. The remaining 50 percent is recommended to be allocated to an education capital fund to pay for future school construction. I would also point out that school debt service in Mecklenburg County far exceeds the $9 million allocated from lottery proceeds.
The legislation states that Public School Building Capital Fund lottery monies can be used for two purposes: 1) school construction projects, including renovation and repair; and 2) school construction indebtedness incurred on or after January 1, 2003. No county matching funds are required to use these funds. The only restriction is that these funds cannot be used for school technology needs.
My strategy for using the education lottery proceeds is consistent with the legislation on how these funds can be used. However, the use of lottery funds to offset debt service costs, per the legislation, results in an equal amount of growth revenue that does not have to be appropriated to pay for increased school debt service costs. Rather than directing those property tax funds to other services, I have recommended a reduction in the Mecklenburg County property tax rate.
I appreciate your interest in Mecklenburg County and in the FY2007 Recommended Budget. I hope this information provides clarity to the intended use of education lottery funds in Mecklenburg County. Please let me know if you have further questions.
Harry L. Jones, Sr.
cc: Mecklenburg County Delegation to the N.C. General Assembly
Mecklenburg Board of County Commissioners